Primary sclerosing cholangitis (PSC) is a progressive chronic cholestatic liver disease of unknown etiology that is commonly associated with chronic colitis. PSC, a common liver disease among adults, usually leads to advanced liver disease and liver failure, and as such, is an important indication for liver transplantation. Unfortunately, no effective medical therapy currently exists for PSC. The group of investigators has a longstanding track record of clinical trials in chronic cholestatic liver disease, particularly in primary sclerosing cholangitis. Recently we have generated promising results from a pilot study using high doses of ursodeoxycholic acid in the treatment of PSC. Lower doses of ursodeoxycholic acid in patients with PSC led to biochemical improvement but did not affect other clinically important endpoints in a previous study. Our pilot data is supported by data from another group showing in a small, randomized trial that high dose ursodeoxycholic acid led to biochemical, histologic, and cholangiographic improvement compared to placebo at two years. In this submission, we propose a large-scale multi-center placebo-controlled randomized trial with a minimum follow-up of four years for 150 patients with primary sclerosing cholangitis. Primary endpoints of the study will include histologic progression to cirrhosis, development of esophageal or gastric varices, need for liver transplantation, and survival. Secondary endpoints will include measurements of the effects of urosodeoxycholic acid (28-30 mg/kd/d) on liver biochemistries, histologic stage, cholangiographic features, Mayo risk score, and quality of life, using validated questionnaires. This study will be the largest ever conducted in PSC and the follow-up will be the most extensive. This will provide an invaluable resource for studying the natural history of this disease and as part of this study we will also collect serum, cells for extraction of DNA, bile, and tissue from the liver and colon as a resource for future studies. The multi-centered nature of this trial will allow recruitment of patients into this study from a diverse patient population, representative of the gender and racial distribution of this disease. Chances of successful completion of this study are enhanced by the large PSC patient population that the participating centers currently manage, recognition of these sites as referral centers for new patients with PSC, as well as a longstanding track record in clinical trials in cholestatic liver disease.